WSB Went Private on Reddit

if the stock is at $20

and you think it will go to $10

you can sell the stock at $20 (even if you actually don't own the stock, and never actually gave the buyer the stock, it's more like a promise that you will deliver the stock at some point)

so now you've pocketed $20 and you're waiting for the stock to go down to $10

then, you can buy it for $10 and deliver the stock

since you got paid $20, but you only paid $10 for the stock, you've made $10

this is called shorting

people have been shorting to the point the number of stocks that are promised to be delivered is 140% of the actual number of stocks

this means that, when those who promised to deliver stocks are actually called in to deliver the stocks they already sold for $20 (or whatever price they shorted at)

they need to buy up 140% of the stocks in existence

needless to say, there are not enough stocks to enable them to cover their shorts

and this creates an insane spiral positive feedback loop in the price

none of it has anything to do with fundamentals of the business, their dividends, balance sheets etc

it's purely an artifact of a quirk state the stock has gotten into

the funny thing is it's dumb retail investors who spotted it and kind of all jumped on in at the same time

we like the stock!

if and when the shorters are truly called in on their promises to deliver the stocks they shorted

they will have to fight over an extremely limited supply of stocks, due to the nature of them having sold 140% of the stocks in existence AND us retail investors who have vacuumed up what little was for sale anyway (only a fraction of all stocks in existence are ever up for sale in the first place, so think of it like us vacuuming them all up and leaving them in a position where they have to deliver 140% of the stocks in existence when only a few percent of them are for sale

= lol